How To Calculate Equivalent Annual Cost Eac 4 Steps

Determine the annual maintenance costs for the asset. [4] X Research source Suppose Analyzer A has an annual maintenance expense of $11,000, while Analyzer B has annual maintenance expense of $8,000.

For Analyzer A, EAC=$100,000∗0. 10(1−(1+0. 10)−5)+$11,000=$37,379. 75{\displaystyle {\text{EAC}}=$100,000*{\frac {0. 10}{(1-(1+0. 10)^{-5})}}+$11,000=$37,379. 75} For Analyzer B, EAC=$130,000∗0. 10(1−(1+0. 10)−7)+$8,000=$34,702. 72{\displaystyle {\text{EAC}}=$130,000*{\frac {0. 10}{(1-(1+0. 10)^{-7})}}+$8,000=$34,702. 72}